European Steelmakers Face Antitrust Investigation

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - The offices of three of Europe's largest steelmakers have been raided by Germany's Federal Cartel Office (GFCO) as part of an antitrust investigation into steel supplies to the automotive industry.

The GFCO searched the offices voestalpine AG (WBAG:VOE) (Linz, Austria), ThyssenKrupp Steel Europe AG (Duisburg, Germany) and ArcelorMittal (NYSE:MT) (Luxembourg, Luxembourg).

"The authority followed up the suspicion that companies on the market for the sale of steel strip and semi-finished products have concluded anti-competitive agreements," the GFCO stated. "The company searches were carried out simultaneously at four sites in Baden-Württemberg, Bavaria and North Rhine-Westphalia. The private residences of persons suspected of involvement in the agreements were also searched. A total of 19 of the Federal Cartel Office staff members took part in the searches, assisted by staff from the local criminal investigation departments."

All three companies have confirmed that they are cooperating with the investigation.

"voestalpine hereby announces that the offices of its German subsidiary voestalpine Deutschland GmbH in Munich were searched yesterday by the Federal Cartel Office due to alleged violation of antitrust law regarding steel deliveries to the German automotive industry," the company confirmed. "voestalpine supports the investigation by the authority."

Heinrich Hiessinger, ThyssenKrupp's Chairman of the Executive Board, told media that the company has a "zero tolerance" policy regarding antitrust violations. "We are in the process of implementing a full-scale change in leadership culture at ThyssenKrupp. I take this very seriously. Anyone who doesn't cooperate has no business working with us."

ThyssenKrupp, voestalpine and others were found guilty by the Federal Cartel Office last year of price fixing in the rail-track sector. The cartel was fined €124.5 million ($162 million) with ThyssenKrupp paying more than €100 million. The incident played a key part in the recent resignation of the company's chairman, Gerhard Cromme.

It's been a difficult few years for Europe's largest steelmaker and the European steel sector as a whole. ThyssenKrupp turned in a net loss of €4.7 billion ($6.2 billion) for its 2012 financial year, blaming poor investments in new steel plants in Brazil and the United States.

Last month, ArcelorMittal announced a freeze on job cuts and restructuring at its European steel operations until June, in order to wait and see what the European Commission's (E.C.) forthcoming Steel Action Plan will do to improve market conditions. For additional information, see February 25, 2013, article - ArcelorMittal 'Freezes' European Job Cuts .

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